BT, BAE Poised for U.K. $12.1 Billion-Pound Smart-Meter Program

BT Group Plc, BAE Systems Plc and Vodafone Group Plc are poised to submit final bids in a 12.1 billion-pound ($18.5 billion) U.K. program to install smart meters in every home.

The SmartReach group, which comprises BT, BAE Systems Detica, Arqiva Ltd. and Sensus, is vying with a proposal from Vodafone and Silver Spring Networks Inc. to build the communications systems that will connect every smart meter to U.K. energy suppliers, executives at the companies said.

Britain plans to install 53 million smart meters by 2019 to help homes and businesses monitor and curb their energy use. The units, which replace traditional power and gas meters, display how much energy is being consumed and at what cost. They relay data back to the suppliers, avoiding the need for meter readings while helping energy companies to smooth peaks in demand.

“We’re trying to help drive the economy and eliminate the need for continued reliance on building new generation,” Silver Spring Chief Executive Officer Scott Lang said in London. “Given all the uncertainty of generation and intermittent technologies like solar and wind, having a smart grid deployed helps bring those intermittent supplies on to the grid.”

Silver Spring, which is proposing its so-called wireless mesh technology to access hard-to-reach meters, connected devices at about 16 million homes and businesses at the end of last year, mainly in North America, Lang said. The Redwood City, California-based company listed in the U.S. in March.

Technology Trials

The SmartReach group will bid to supply its long-range radio-based technology, said David Green, smart-metering sales director for Arqiva. Trials showed the technology reached 99 percent of meters, even in basements, he said. In North America, more than 12 million smart-meter and grid devices use long-range radio networks from its partner Sensus, according to SmartReach.

“When this starts rolling out properly, which is going to be towards the end of 2014, it will be really big news because every household in the country will be affected,” Green said in an interview. “It’s been proven time and time again that giving people that information will reduce their consumption by a moderate amount.”

The Department of Energy and Climate Change, or DECC, expects to announce the winning bid in July after shortlisting four groups, a spokeswoman said by e-mail. The remaining two bids are from Airwave Solutions Ltd. and Telefonica SA.

The program will cost 12.1 billion pounds and provide 18.6 billion pounds in “benefits,” resulting in a 6.7 billion-pound net benefit to the U.K over the next 20 years, according to DECC.

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